Overtime Misclassification — Claiming Unpaid Overtime
What Is It?
The Fair Labor Standards Act (FLSA) requires most employers to pay workers time-and-a-half for hours worked over 40 in a workweek. However, many employers incorrectly classify employees as “exempt” from overtime — either by giving them a salaried title that sounds managerial or by classifying them as independent contractors. The Department of Labor has estimated that millions of workers are misclassified and missing out on overtime pay they are legally owed.
If you are misclassified, you have the right to recover unpaid overtime going back up to two years (three years if the violation was willful), plus an equal amount in liquidated damages — effectively doubling your recovery.
How It Works
- Understand the exemption test. Being salaried does not automatically make you exempt. To be exempt from overtime, you must meet ALL of the following:
- Be paid on a salary basis (not hourly)
- Earn at least $43,888 per year ($844/week) as of the 2024 DOL rule (though this threshold has been subject to legal challenges — verify the current threshold)
- Perform job duties that genuinely fall under one of the FLSA’s “white collar” exemptions: executive, administrative, professional, computer employee, or outside sales
- Evaluate your actual duties. The exemption is based on what you actually do, not your job title. If your employer calls you a “manager” but you spend most of your time doing the same work as non-exempt employees and don’t supervise anyone, you may be misclassified.
- Document your hours. Keep personal records of your actual hours worked, including start and end times, and any work done off the clock (answering emails, working through lunch, etc.).
- File a claim. You can file a complaint with the U.S. Department of Labor’s Wage and Hour Division (it’s free and they investigate on your behalf), or you can hire a private attorney. Many employment attorneys take these cases on contingency (no upfront cost).
What Most People Don’t Know
- “Salaried” does not mean “exempt.” This is the most widespread misunderstanding. The salary basis is only one of three tests — the duties test is what usually matters most.
- You can recover double damages. The FLSA provides for “liquidated damages” equal to the amount of unpaid overtime, effectively doubling your recovery. This is the default unless the employer can prove it acted in good faith.
- Retaliation is illegal. The FLSA prohibits employers from retaliating against employees who file overtime complaints. If they do, you have an additional claim.
- State laws may be more generous. States like California, New York, and Washington have stricter overtime rules and higher salary thresholds. California, for example, requires overtime for hours worked over 8 in a single day (not just 40 in a week).
- You don’t need your employer’s records. If the employer didn’t keep proper time records (which is their legal obligation), courts will accept the employee’s reasonable reconstruction of hours worked.
Who Benefits Most?
Workers with titles like “assistant manager,” “team lead,” “coordinator,” or “supervisor” who earn a salary but spend most of their time doing non-managerial work. Also common in retail, food service, IT support, and healthcare settings.
Legal Basis
- Fair Labor Standards Act (FLSA) — 29 U.S.C. § 207(a) (overtime requirements), § 213(a)(1) (white collar exemptions)
- 29 CFR Part 541 — DOL regulations defining the executive, administrative, professional, computer, and outside sales exemptions in detail
- 29 U.S.C. § 216(b) — Provides for liquidated damages (double back pay) and attorney’s fees for FLSA violations
- 29 U.S.C. § 215(a)(3) — Anti-retaliation provision protecting workers who file complaints